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OPEN UNIVERSITY MALAYSIA

BMPM5103
PERFORMANCE MANAGEMENT
MAY 2019 SEMESTER

PREPARED TO:
LECTURER’S NAME

PREPARED BY:

No Name Matric No. Signature


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CONTENT

PAGE

1 INTRODUCTION 1

1.1 Approaches taken to measure performance at the 1


workplace
1.2 Arising problems when addressing performance
5
measurement

2 FINDINGS 6

2.1 Organizational Profile 6


2.2 The strategies and techniques used to measure 7
performance at MAHSA College Sabah Campus.
8
2.3 Performance measurement in MAHSA College Sabah
Campus.

3 DISCUSSIONS 9

3.1 Issues arising in MCS. 9


3.2 The tools used to measure performance in MAHSA 10
College Sabah Campus.
11
3.2.1 KPI Appraisal
3.2.2 KSA Appraisal 13

4 RECOMMENDATIONS 17

5 REFERENCES 19
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1. INTRODUCTION

1.1 Approach for measuring performance of employees

In today globalization era, the measurement and analysis performance of employee’s is the

fundamental of providing the company or organization with sustainable economic

development. This measurement system may vary and brings an implicit definition of

performance depends on the organizations or company policies. According to the previous

researcher, there are many questions rising up when it comes to measuring the performance

of employees or performance management process. Often, we heard the phrases such as “you

are what you decided to be” and “if you can’t measure it, you can manage it” (Islam, Adler

and Northcott, 2017). These questions are vital and surely true when measuring the

employees’ performance are becomes necessity and these choices are directly affect the

results. Performance measurement is a demanding business and has several approaches from

multiple perspectives. The implementation of performance measurement could bring positive

or negative impact on individual and organizations holistically.

Nowadays some company or organization basically measure employee performance

by assessing how much they contribute to the company’s growth or development. Usually,

this is given to the employee at the time of their performance appraisal. The term of

performance appraisal is the mechanism of evaluating the employees by providing them with

significant response and it gives the two parties a platform to create a positive effect on the

future company’s development and the employee’s performances. Therefore, this study will

identify and assess how performance measurement is administered and some literature review

regarding the performance measurement in an organization.

In a few decades until now, choosing suitable methods in measuring the employee’s

performance is one of the most critical challenges facing by many organizations in the world.
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As they play a vital role in developing strategic plans, thus their decision is very crucial.

Performance management system depends on the type of the business. However, the

performance analysis relates to the productivity of a company or the result of an organization.

In this context, performance appraisal is the mechanism in a way to recognize the current

skills employees or their contribution to their work force. Adnan and Yousif (2014) reviewed

the approach of performance appraisal in two different branches which are traditional (past

oriented) and modern approach. According to their study, traditional methods are only

focused on the evaluation of the past performance such as ranking method between the

employees, graphical rating scales, critical incident method and narrative essay. These

methods basically concerned about the comparison between superior and his employee and

the evaluation of employee strength in terms of attitude and performance. Meanwhile the

modern methods were more to enhancing the conventional methods. The modern methods are

including management by objectives (MBO), behaviourally anchored rating scales (BARS),

humans’ resource accounting (HRA), assessment centres, 360 and 720 degree. However,

each method has pro and cons especially when the company has to find the best answer to the

evaluation aspects besides achieving the goal and their decision.

Subsequently, due to the increasing number of public and private universities in

Sudan, Adnan and Yousif (2014) proposed the approach to measure the performance of

employee by introducing performance evaluation of Sudanese universities and academic staff

using fuzzy logic. This approach is a combination of multiple techniques including fuzzy

Analytic Hierarchy Analysis (FAHP) (Russell and Taylor, 2003). FAHP is a quantitative

technique for rating decision alternatives and selection of the one given multiple criterions. It

drafted the alternatives into a hierarchical framework to resolve complicated decisions.

Furthermore, this method consists of four layers with hierarchical structure such as faculties,

academic staff, info-structure and administration. In order to evaluate the performance, Fuzzy
3

Technique for Order Preference by Similarity to Ideal Solution (FTOPSIS) technique was

conducted while, the FAHP method as a weighting parameter. FTOPSIS is the multi-criteria

decision-making technique that extensively used to solve MCDM problems. TOPSIS

technique based on the concept that selected alternative is the shortest geometric distance to

the positive ideal solution and the longest geometric distance to the negative ideal solution.

The data were obtained through interview and survey.

On the other hand, Yaghoobi and Haddadi (2016) used different approach by

describing the theoretical framework which is combining the Balanced Scorecard (BSC) and

Analytic Hierarchy Analysis (AHP). Their findings focusing on how to develop a

performance measurement model by integrating two techniques of BSC and AHP within a

telecommunications company. Later, this methods lead in assessing the company KPIs, the

perspective of BSC and the best organizational unit. The results can help the organization to

evaluate and revise its strategy and generally to adopt modern management approaches in

everyday practice. The approach has benefits which we state in the two following paragraphs.

BSC integrate several perspectives for company performance evaluation and enables

the company to enhance performance at all levels. In addition, BSC focus on the importance

of measuring business performance from the perspective of strategic implementation, rather

than relying solely on financial results. However, senior managers tend to pay far too much

attention to the financial dimensions of performance and not enough attention to driving

forces behind those results. The approach is focused to offer a comprehensive view of how

the enterprise is doing and where it is going. Therefore, it will help managers see if any key

factors are missing. In response to the method, participants of the evaluation process gain

input into the critical areas of the decision process. AHP provides a comprehensive and

rational framework for structuring a decision problem, representing and quantifying its

elements, relating those elements to overall goals and evaluating alternative solutions. OPM
4

can be stated as a MADM problem and AHP is effective in addressing comparative analysis

of OPM models. AHP in comparison with other MADM methods, such as Multi Attribute

Utility Theory (MAUT), Simple Multi Attribute Rating Technique (SMART), simple

additive weighting method, weighted product method and TOPSIS satisfies sub evaluation,

flexible, dynamic and future insight requirements of a performance measurement model

(Lukka and Vinnari, 2014). By providing a hierarchical model, the AHP technique is able to

give sub evaluations such as customer performance or processes performance. Another

advantage is that subjective qualitative information is transformed into quantitative data

which can be used for management decisions. AHP is a viable means for rapid decision-

making in a team of very different scientists and provides results consistent with those

derived though more in-depth and time-consuming approaches as it forces structured

decision- making and allows the team to evaluate biases and trends within groups

Furthermore, Michael, Melanie and Dinesh (2014) addressing a different approach in

measuring the employee’s performance. They introduced the appraisal policy in an

organisation. In order to measure the employee performance, they were used the same

technique in Islam (2016) which is taking the feedback from the various sources including the

supervisor, peers and the employee. From this mechanism, the purpose is to get different

inputs from different people. Lending from Aguinis (2009), the employee performance

should be evaluate based on wide range of aspects. By looking at only one or some factors to

be considered, the result could be inaccurate and as a result leaves a bad impression on

employees as well as the company. Therefore, it is important to take a balance set of

measurement in order to evaluate the employee’s performance. Michael et al. (2014) also

reviewing the study from Armstrong (2001) where the performance appraisal policy is a

fundamental process involving both supervisors and the employees. The objective is to

identify the common goals of the organizations.


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1.2 Arising problems when addressing performance measurement

At present, the measurement of performance has been understood as one of the management

functions. Thus, it is important to analyzed suitable performance measurement and executes

the process wisely. However, when it comes to addressing the performance measurement, it

is can be a frustrating process because so many problems will arise. In corresponding to this

issue, there has been a continuous discussion in the perspective of performance measurement.

As we know, organizations require performance assessments in order to evaluate the

employee’s performance. Thus, it is very essential to know the arising problem regarding this

issue.

The problems in performance measurement system might be happening because of

they do not produce results that were originally desired or wanted. Instead, it turns out brings

a negative impact to the employees as well as to the organization. Some results maybe

worsen the true performance even though the measures indicate the improvements in

performance (Islam et al. 2017). Michael et al. (2014) states that even though performance

appraisal policy is the best tool for measuring the employee’s performance, but there is a

frequent complaint regarding the problems among managers. The underlying problem

happens when these managers give poor feedback to employees due to insufficient training

such as coaching, mentoring and support. In fact, the procedure of performance appraisal

policy is poorly designed thus making it complicated and difficult to execute. Furthermore,

the problems happen because of employee’s attitude towards the implementation of

performance appraisal policy. The conflict happens on the purpose or goals of a performance

appraisal when implemented. Michael et al. (2014) also states the managers often fail to

provide timely and accurate expectations and feedback to employees regarding their

performance. In addition, negative feedback given by the supervisor or manage can caused

miscommunication among them and reducing morale as well as decreasing employee


6

performance. Moreover, some employees with their group often opposed the implementation

of performance appraisal policy due to various factors such as distrust their manager’s

capability and developed the perception of performance appraisal evaluation is unfair.

On the other hand, the problem with performance measurement happens because of

its disfunction. This might be happened when setting targets, measuring performance and

comparing actual results with the targets (Lewis, 2017). It is evident that when a performance

measurement system is put into place, some of the resulting consequences will be things that

were expected to happen, but many of them will not.

BSC is that they suggest the area where to focus with little instruction on how to

identify, introduce and execute the real measurements with the organizations or company.

This is supported by Mishra and Sahoo (2015). based on their research. They asserts that

BSC is not yet mature, thus exist the differences in its interpretation and practices. There is

one observation that the differential outcomes of the BSC is because of the concept still

developing (Madsen and Stenheim, 2014).

2. FINDINGS

In this part of study, I will describe the company in more detail, analyse the strategies and

techniques used to measure performance among employees. After that, the issues with the

current performance measurement system in the company, present the measurements tools

used and discuss the methods between the theory and findings and the recommendation.

2.1 Organizational Profile

Malaysia Allied Health Sciences Academy (MAHSA) College Sabah Campus was founded

in the 2005 by Professor Tan Sri Dr. Hj. Mohamed Haniffa who is also Pro-Chancellor and

Executive Chairman of MAHSA University. It opened officially and established on 22


7

November 2011 as an extension of MAHSA University. MSC is located in the 1Borneo

Hypermall Kota Kinabalu Sabah. With over 60 staff, MCS grew rapidly as an institution of

higher learning that it now expanding and introducing programmes to meet market demand in

Sabah and Sarawak. There are seven ten programmes in MCS such as Diploma in

Physiotherapy, Diploma in Pharmacy, Diploma in Business Administration, Diploma in

Medical Laboratory Technology, Diploma in Medical Imaging, Diploma in Environmental

Health, Diploma in Accounting, Diploma in Entrepreneurship, Foundation in Science and

Certificate in Business Studies.

MCS committed to deliver good quality of education, produce highly competent and

skilled professionals through qualified, dedicated and experienced teachers. Besides that,

their mission is to provide state-of-the-art facilities to ensure the desired standards in

education. They also aim to facilitate and enhancing local as well as international networking

students and staff. In terms of 6research and innovation, they are committed to enhance and

provide a great opportunity at all levels.

2.2 The strategies and techniques used to measure performance at MCS.

The choice of performance measures is very essential in an organization as the employees

play important roles in developing the strategic plans and for their future development. The

integration of strategy, execution and measures is vital to the ultimate goals. In MCS, the

performance measurement frameworks based on Field Review Appraisal Techniques which

is CEO/principal and human resource professionals will assist the head of department in

conducting appraisal. This type of system improves reliability and standardization because a

personnel professional is doing assessment. The conceptual framework of measuring

performance in MSC is presented in the Figure 1. In Figure 1, the process of performance

appraisal is given to all staff including the Head of department. In this context, there are two
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groups to be measured. First for academician, administration staff and marketing staff. There

is certain standard in analysing the employee’s performance before the HOD or human

resource communicating standard sets of employees with the CEO. After that, the measuring

process will take place. In this process, they will make a comparison performance with

standard which is based on KPI scaling. Subsequently, the result will be discussed in a

meeting and certain kind of action will be taken depends on the standard evaluation.

Process of Setting Performance Communicating standard


performance appraisal standard sets of employees

Measuring performance Comparing performance


with standard

Discussing result &


taking action

Setting Performance
standard
Figure 1: Conceptual Framework

2.3 Performance measurement in MAHSA College Sabah Campus

To analyse the employee’s performance in MCS, some of the existing material about report

and performance measures from the human resources executive has been collected. These

included the current performance reports, raw data report, all existing documentation about

the measures and development project target documentation. These documents were then

supplemented with short discussions/semi-structured interviews of the main users and

creators of the reports to understand the big picture behind the measurement system. During

the interview session, the study by Ferreira & Otley (2009) was used as the essence for the

discussions because it offers 12 questions related to ‘what’ and ‘how’ of Performance


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management and helps assesses the design and use of the system. In this spectrum, the main

questions were: what are the primary objectives of the process; what are the key measures in

the PMS; how the reports are created; how the users are using the reports; what are the major

tools in the system; what are the biggest issues of the system; is there a review process for the

measures; how the information is distributed. I interviewed the human resource executive and

it took 1-1.5 hours per interviewee. Even though the main themes were defined, the

discussion was let freely to float towards the subjects that were in the interviewee’s interest

and own special area. Hence, at the greater level there did not seem to be any conflicts

between the views of the main PMS users and their objectives were uniform, which helped to

assess the issue areas.

3. DISCUSSION

3.1. Issues arising in MCS.

In this section, this study has been identified several problem areas with the current

performance measurement system. The general view was that the whole measurement

ensemble did not perfectly capture and measure the needs of the process. In this study, we

noticed that in MCS as new performance measures were added and old ones were updated,

the processes were not documented properly. There had also been problems with the base

data for the process; there were problems with errors in the data and hence issues with the

data validation. The cause of this issue is the system and management of the previous and the

current CEO is different. The system has been deliberately changed according to the way of

manager handling the human resource department.

The arising issues in MCS are particularly in terms of recognition and appreciation.

As the education sector, where performance measures were based on tests scores changing

students’ grades and “teaching the test” in order to boost the results-based rewards in college
10

occurred. According to the response from the HR executive, the most comments from the

staff when the appraisal performance taken is regarding the salary increment, bonuses and

recognition from the company. In fact, this issue is one of the biggest issues circulating

around them. Even though the issue has been escalated into the Head Quarters in Kuala

Lumpur and yearly appraisal performance has been done but the result is still the same. The

HR executive also mentioned that, the bonuses and salary increment depend on the college

total revenue yearly. The total revenue basically based on how many students register per

year. This has been the main reason for the welfare problem.

Besides that, another problem arising in MCS is the management system in the

workplace. This is related to the fundamental issue when it comes to the certain aspects such

as staff training, payment for claims welfare, health care, and other benefits in the company.

The issue has been happened since the MCS officially opened in 2012. In this context, to get

all the claims and budget for training it takes a long time to get the approval from the head of

management. This is something that could delay the process and make it even more

inefficient to do. According to the report in 2018, some employees suggested that the

management should be more flexible and efficient enough to handle the problem.

Therefore, this study had noticed a need to develop performance measurement and

process’s current key performance indicators (KPIs) from their present state to better meet

the needs of the process. The study also outlined based on this function and hence

concentrates on performance measurement and management of process.

3.2 Tools used to measure performance

This section will explain the tools in measuring the employee’s performance in MAHSA

College Sabah Campus. The tool consists of two measurements which is KPI Appraisal and

KSA Appraisal. The overall performance measured involving the academic staff,
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administration and marketing department. In section3.2.1 will discuss the type of

performance appraisal in MCS

3.2.1 KPI Appraisal

This section focuses on discussing the various strategies and techniques used to measure

performance of lecturers at the MSC. The study found that MSC has in place an appraisal

system, and this was largely acknowledge by all the categories of employees; junior and

seniors members. Therefore, there are key performance criteria that have been developed and

clearly identified in the appraisal system. In this context, the findings showed necessary

resources are available to implement an effective appraisal system in the institution. The

Human resource executive was very positive on whether the performance criteria have been

extracted from an up-to-date job description.

From the findings, there are sufficient preparations by the CEO/ principal, Head of

department and workers before the appraisal process is undertaken. The appraisal process is

conducted fairly and taking the individual and department performance into consideration.

This is related to the MCS missions where they are committed to deliver the highest quality

education with emphasis on-hands-on training. Besides that, MCS aim to produce competent

and highly skilled professionals through qualified, dedicated and experienced teachers. Thus,

performance analysis is very essential in order to analyze and determined whether the

respective missions can be achieve.

In MCS Performance appraisals is the main technique as a performance management

tool. Key Performance Indicators (KPIs) is one of the parts under performance appraisal.

This indicator provide a way to measure on how well the business and individuals are

performing in relation to their strategic goals and objectives. KPI appraisals carry 50% of

overall evaluation. According to the HR executive, the performance appraisal will be given to
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the employees twice a year which is Midyear appraisal and End Year Appraisal. The KPIs

consist of eight indicators to be examined such as cancellation of scheduled lecturers,

unscheduled classes, Uploading of lecturers materials into LMS, students satisfaction rate

(SSI), students attrition rate after the start of semester, teaching load, mentor-mentee sessions

for all assigned students and attendance at assigned committee meeting. The head of

programmes will evaluate the lecturers according to their respective department. The scoring

system will be given within the range of 0 to 5 as shown in Table 1 below.

No Indicators Percentage (%) meet the KPI

0 Not Applicable (N/A) 0% - 24%

1 Unacceptable (U) 25% - 49%

2 Needs Improvements (NI) 50% - 74%

3 Satisfactory (S) 75% - 99%

4 More than Satisfactory (M) 100%

5 Exceptional (E) Exceed the KPI

Table 1: KPI appraisal scoring of MCS

Based on the KPI appraisal score, the employees should achieve percentage more than

satisfactory to meet the KPI requirement. Then, the overall KPI appraisal is computes by

using the formula:

Overall KPI Appraisal Total Score


=  50
(Excluding not applicable N/A) Total item appraised

3.2.2 KSA Model Appraisal

The second technique in measuring employee’s performance in MCS is through KSA

Appraisal model. The acronym KSA stands for Knowledge, Skills, and Abilities and this

model is very essential in of human resources and corporate education context. The
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objectives of KSA are specifically defining the requirements of a job opening and compare

candidates when making a final selection. In this part, Head of programmes and Human

resource department will evaluate the criteria in Table 2 according to the given rating scale.

CATEGORY E MS S NI U NA
5 4 3 2 1 0
Has achieved required level
of knowledge and skills in
position-related areas.
Applies knowledge and skills
to meet job requirements
JOB KNOWLEDGE Keeps up to date in all
relevant knowledge and skills
areas to meet job
requirements
Comments
Effectively designs work
plans, anticipate and
overcome obstacles
PLANNING Determines tasks and secures
appropriate resources to get
K things done
Prioritizes multiples activities
and assignments effectively
and adjust as appropriate
Comments
Use time effectively and stays
focused to ensure work is
completed
ORGANIZING Meets commitment and
deadlines consistently
Implement and monitor work
activities efficiently and
effectively
Comments
Relates well to all people
internally and externally
Builds and maintaining
effective working
INTERPERSONAL relationships
COMMUNICATIONS
Practices attentive and active
listening
Tolerate with pressure
situations comfortably such as
using diplomacy and tact
Comments
Inspires and guides
individuals toward higher
levels of performance
Treats people with dignity,
respect, and fairness
S Creates a climate in which
LEADERSHIP people want to do their best
14

Serves as a positive role


model
Operates with integrity,
honesty and courage
Ability to lead and motivate
others to obtain and achieved
specified goals
Comments
COACHING Clarifies expected behaviours
and levels of performance
Set clear objectives and
measures
Provides the necessary
information, support and
resources for staff to be
effective
Provides timely feedback and
guidance on performance
Works with employees to
reinforce effective efforts and
progress or improve
performance
Comments
Accurately and carefully
follow process/procedures for
completing work
Ensures a high-quality output
QUALITY OF WORK of work (resulting in minimal
acceptable/zero errors)
Attentive to all details and
aspects of a job or process to
ensure a complete, high
quality output
Comments
Identifies issues, problems
and opportunities then
determines that action is
needed
Probes all relevant sources to
better understand problem
DECISION MAKING issues or opportunities
Analyzes information and
generates options and
considering implications in a
timely manner
Involves others as needed to
ensure quality and
commitment of decision
Comments
Works with individual to set
performance goals and
expectations
MANAGING WORK Set development or individual
work plans
Monitors performance
progress
Able to monitor and improve
15

their own work (self-audit)


Comments
Ability to understand the
impact of technological
changes and adapt the
TECHNOLOGY changes to improve work
effectiveness
Ability to use efficient and
cost effective approaches to
integrate technology into the
workplace and improve work
effectiveness
Comments
Takes actions that consistent
with department objective
Looks for and takes
advantage of opportunities to
act beyond what is required
Regularly looks for common
ground and encourages
INITIATIVE collaboration among team
members
Volunteers readily
Suggest methods and
procedures to improve
departmental operations
Comments
Conducts work within the
established department
practices
Conducts work according to
the established and approved
A WORK HABITS work schedule
Positive attitude that
demonstrate towards work
assigned and other task given
Demonstrates professionalism
and good etiquette at
workplace
Comments
Maintains effective
performance under pressure
Copes effectively and
develops effective approaches
to deal with pressure or stress
COMPOSURE Ability to maintain
composure, effectiveness and
flexibility under pressure at
all time
Presents a positive disposition
and maintains constructive
interpersonal relationships
when under stress
Comments
Table 2: KSA Appraisal Scoring MCS
16

Based on the KSA appraisal score, the employees should achieve percentage more than

satisfactory to meet the KSA requirement. Comments are recommended for all ratings but it

is mandatory requirement for ‘Needs Improvement’ (NI) and ‘Unacceptable’ (U). Then, the

overall KSA appraisal is computes by using the formula:

Overall Performance KSA Appraisal (Excluding Total Score


=
not applicable N/A) Total item appraised

Overall KSA Appraisal (Excluding not Total Score


=  30
applicable N/A) Total item appraised

To measure the overall performance, the score will be sum up by using four criteria which is

Total score of KPI and KSA Appraisal, Merit point includes Compliments, local awards,

international awards and involvement in activity organised by MCS. The third criteria are

Demerit point includes the number of reminders, warning letter and domestic inquiry. Lastly,

the overall performances are computing over 100% score.

Corresponding to that, for academician Academic staff workload balance is another

tool to measure their performance. In this area, there are several components to be determine.

The components are including Formal Schedule Teaching (FST), Teaching Delivery Related

Activity (TDRA), Research and Development Activity (RSA), Academic Leadership,

Management and Administration, Consultancy & Business Development, Faculty

Responsibility and finally other activities involving students. The total workload is calculated

based on how many hours for academician accomplishing all the components in the workload

area. This workload may vary depends on the department and cross-teach subject. While for

the Administration department, they were evaluate based on their workload and how many

tasks they have according to the numbers of student’s intake. Meanwhile, for the marketing

department, there are specific target of numbers in terms of student’s registration in every

year. They have to achieve the target in order to get more merit and achievements.
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4. RECOMMENDATION AND CONCLUSION

The goal of this study was to identify and assess how performance measurement is

administered in a selected organisation. Therefore, MAHSA College Sabah Campus has been

selected to be the choice and discussed in this study. The environment and performance

measurement system in this organization with many different groups and forces affecting the

overall measurement. By understanding how the problems emerge and affect the PMS can

help to identify new mechanisms for their management (Giovannoni & Maraghini, 2013).

Through constructive research a new model for performance measurement was created,

which considers these different perspectives. The case presented in the study illuminates the

different forces affecting the PMS and focuses on creating a context-rich understanding of

how performance measurement can be designed, developed and managed in this kind of an

environment.

In the MCS case, the existent performance measurement system was analysed and

developed from its previous state with the help of constructive research approach. This meant

refining performance measurement reporting, documentation, roles and communicational

aspects. Through the empirical research it was noted that there are several factors present that

constantly affect how the measurement system operates. These factors were brought together

to form a framework for measuring process performance in another similar environment. The

factors discovered in the study are: organization’s vision and objectives, organizational

context and culture, organizational infrastructure and IT, interorganizational cooperation and

the staff welfare with diverse expectations towards the performance measurement system. In

addition, resource constraints, meaning here time, costs and employee resources, were

constantly present and affected the measurement system and the processes that are measured.
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In c conclusion, the organizational environment may be quite turbulent, changing

remarkably in a short period of time which calls for understanding how PMSs adapt to the

changing operating environment. This is likely to have a significant effect on the goals of

performance measurement systems as well as on the ways they are designed and used. More

thorough research on employee motivation in open, flexible performance measurement

systems is needed. Today’s operating environment also leads to very context-specific

solutions to performance measurement problems and may require reassessment of

performance management practices.


19

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